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Global business travel prices “seem to be levelling off” – Business Traveller

The business travel industry “could now be looking at the true new cost of travel”, according to the latest forecasts by CWT and the Global Business Travel Association.

The 2024 Global Business Travel Forecast states that “more subdued price increases” are expected over the next 12-18 months, following “skyrocketing” prices last year driven by pent-up leisure travel demand, rising fuel prices, labour shortages and supply chain challenges.

The global average ticket price (ATP) of flights booked for business travel rose by 72.2 per cent year-on-year to $749 in 2022, surpassing 2019 levels of $670.

The report forecasts that ATP growth is likely to be a more modest 2.3 per cent in 2023, and 1.8 per cent in 2024, as a result of “lingering economic uncertainty and a gradual easing of supply-side constraints”.

The hospitality sector also experienced rising costs last year, with the global average daily rate (ADR) for hotel bookings increasing by 29.8 per cent year-on-year to $161. This figure is forecast to increase by a further 4.3 per cent in 2023, and 3.6 per cent in 2024.

And car rental costs also increased 9.8 per cent year-on-year in 2022, with supply “constricted as companies sold vehicles during the pandemic when demand collapsed”. Costs are forecast to rise a further 6.7 per cent this year, and 2.1 per cent in 2024.

The report is based on data from more than 70 million ticketed flights, over 125 million hotel room night bookings and more than 30 million car hires from 2018 to the present.

In June the International Air Transport Association (IATA) published its revised outlook forecasting that 4.35 billion individual people will fly in 2023, not far off the 4.54 billion people who took a flight in 2019.

Global passenger traffic surpassed 6.6 billion in 2022

Commenting on the news Patrick Andersen, CWT’s chief executive officer, said:

“A potent combination of demand and supply-side pressures propelled travel prices higher than expected last year.

“Looking forward, prices seem to be levelling off with much milder increases projected over the next 12 to 18 months. We could now be looking at the true new cost of travel.

“Our focus remains on helping our customers find the right strategies and solutions to get the most out of their travel budgets, meet their ESG commitments, and maximize the ROI on their travel spend.”

To read the report in full, click here.

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